The European Union's Eastern neighbours

December 5, 2005 - nr.44
Summary

The interests of the European Union and the Netherlands in a geopolitical perspective

 

 

 

 

 

The European Union has a broad range of foreign policy objectives. Using every policy instrument at its disposal, the Union seeks to promote international peace and security, sustainable development, solidarity and mutual respect among peoples, free and fair trade, the eradication of poverty, the protection of human rights and the strict enforcement and ongoing development of international law.[1] These objectives lie at the heart of the European Neighbourhood Policy (ENP), which forms the subject of this AIV report, with particular interest in Eastern Europe. As stated in the introduction, the ENP and the associated policy instruments are vehicles for improving relations with ENP countries. The immediate goal is to contribute to stability and security in the areas bordering the expanding Union. To that end, the ENP aims to support and encourage democratisation, strengthen the rule of law and initiate economic reforms in the countries in question. The Union is not alone in its ambitions. As mentioned above, a great many international organisations are operating in these same countries. These organisations include the World Bank, the IMF, the EBRD, the Council of Europe and the OSCE. In ratifying the UN human rights conventions and the ILO conventions, the countries in question have committed themselves to upholding the fundamental principles of the rule of law. In addition to these multilateral efforts, there are numerous bilateral partnerships, such as those under the auspices of Dutch programmes like Matra and PSO.

 

 

 

 

 

In chapter II of this report, the AIV indicated that a number of vital interests of the Union (and, by extension, the Netherlands) would be served by strengthening relations with our neighbours to the east. Besides the immediate political significance of security and stability, there is also a need to jointly tackle transnational problems (both preexisting and potential). What is more, these new neighbours can also become important trading partners. The Union is already an important export market and investment partner for these countries. In that connection, it is important to mention the Union’s growing need for energy. Given that many of the eastern neighbours (including Russia) are energy-exporting countries or transit countries, cooperation with our neighbours will be crucial if we are to secure our own energy supplies.

 

 

 

 

 

Since the ENP was first launched, major political developments have taken place in a number of partner countries. Reformist governments have come to power in Ukraine, Georgia and Moldova. These developments not only underscore the need to strengthen relations with these countries, they also offer the EU new opportunities for advancing the political reform process. In view of the close historical and cultural ties between these countries and EU member states and given the organisation’s role as a major donor, trading partner and investor, the Union is in an excellent position to capitalise on these developments and deepen relations in furtherance of its avowed objectives.

 

 

 

 

 

         For these reasons the AIV stresses the importance of a broad-based neighbourhood policy for both the EU and the Netherlands. Whenever possible, this policy should be intensified and accelerated in response to political developments in the countries concerned, as was done in Ukraine.

 

 

 

 

 

The European Neighbourhood Policy (ENP)

 

 

 

 

 

In principle, the structure of the ENP, as established by the Union in 2004 and elaborated on in the subsequent action plans, offers good opportunities for responding to political developments in the EU’s eastern neighbours and promoting the Union’s interests by strengthening relations with these countries and stimulating democratisation and market reforms, thus making a real contribution to stability and security. At the same time, there are clearly major differences among the eastern ENP countries. This means that the details of the policy will have to be worked out from country to country, depending on its needs and those of the EU.

 

 

 

 

 

         In general the AIV endorses the Union’s approach as set out in the ENP, particularly the programmatic character of its objectives, the broad use of resources and instruments and the country-specific strategy, which allows the countries concerned to set priorities on the basis of their own needs. In the view of the AIV, the decision to allow the countries to set their own priorities and implement policy will go a long way to maximising the ENP’s chances of success.

 

 

 

 

 

To take advantage of the possibilities opened up by the ENP, the AIV recommends the following:

 

 

 

 

 

         Recommendation 1

 

 

         The EU needs to take the lead in coordinating and harmonising the multilateral and bilateral aid programmes in the relevant countries. Considering the nature and size of the aid and the scope of the policy instruments at its disposal, the Union is the obvious organisation to increase the coherence and effectiveness of aid efforts, in accordance with stated policy priorities.

 

 

 

 

 

         Recommendation 2

 

 

         In order to increase the effectiveness of the ENP and the action plans, the AIV feels that priorities should be stated more clearly in the broadly formulated cluster of topics that typifies the policy. Of course, these priorities will differ from place to place and, in keeping with the principle of ownership, they will have to be identified in close consultation with the governments and parliaments of the ENP countries.

 

 

 

 

 

         Recommendation 3

 

 

         In view of the firm link between institutional capacity-building in the public sector and market reforms, the AIV would argue that in this phase the focus should be not only on strengthening the democratic system and promoting the rule of law and civil society but also on bolstering the institutions that will be critical for improving the investment and business climate and liberalising trade. Specifically, this will mean providing help and support for the financial sector, fighting corruption and strengthening the customs agency and audit office. The presence of effective institutions and regulations in these areas is a prerequisite for the continued integration of these countries into the European internal market. At this stage, support for economic development and good governance should be a higher priority than acceptance of the acquis communautaire.[2]

 

 

 

 

 

         Recommendation 4

 

 

         The AIV believes that the ENP and the various bilateral efforts (see below) should make greater use of exchange programmes. These programmes, which can make a major contribution to the transfer and expansion of knowledge and experience, should be opened to a wide variety of target groups, from businesspeople to government officials, from politicians to students. The AIV would recommend increasing the opportunities for exchange between EU member states and ENP countries. In the process, an effort should be made to determine whether these countries could be admitted to existing EU exchange programmes, such as the Erasmus programme.

 

 

 

 

 

Regional conflicts

 

 

 

 

 

In a number of countries involved in the programme, the national government does not exercise control over the entire territory. This is the case in Azerbaijan, Georgia and Moldova. This lack of control translates into ‘frozen conflicts’, which are hard to resolve and a source of political instability. Achieving the ENP’s objectives will depend on ending these conflicts. If ENP countries are to have any hope of joining the Union one day, an acceptable settlement must be found. A subsidiary goal of the ENP and the associated action plans (Moldova) is resolving these types of conflicts. With that in mind, the EU has appointed two special representatives, for the Caucasus and for Moldova. Obviously, a political solution to these conflicts is contingent on a cooperative attitude on the part of Russia, which is directly involved in all these conflicts, both politically and militarily, whether in the form of an outright military presence or through its involvement in so-called peacekeeping forces.

 

 

 

 

 

         Recommendation 5

 

 

         The AIV would encourage the EU to take an active role in resolving these frozen conflicts. Active involvement is consistent with the objectives of the ENP and the ambitions of the Union’s foreign policy, as set down in the European Security Strategy and elsewhere. The ENP action plans must serve to move all parties closer to workable solutions to these conflicts. This presupposes a maximum effort on the part of the Union’s special representatives for the countries/regions in question. If any progress is to be made, the EU must ensure that Russia is a full partner in any peace talks. One way of doing this is through political dialogue.

 

 

 

 

 

The European Neighbourhood Policy Instruments (ENPI)

 

 

 

 

 

The AIV welcomes the EU’s initiative to radically simplify the procedure for spending aid money as part of a larger effort to cut back on the number of regulations (budget lines) and instruments. The AIV also supports the resolution to substantially increase financial support for ENP countries and would urge the government to ensure that this increase finds its way into the Union’s multi-annual budget. The European Commission was right to suggest that there should be no ceilings on aid based on country or category of applicant (governmental vs. non-governmental). The absence of such ceilings will encourage the efficient and effective use of resources. This process of simplification is badly needed, since experience has shown that both governmental agencies and NGOs are frequently incapable of following all the myriad rules governing the submission of plans. Given this, it is hardly surprising that the EU has had difficulty spending available resources in a timely manner. The AIV is pleased to see that the action plans now make use of a result-based progress system, in which advancement to the next phase is dependent on performance in earlier phases.

 

 

 

 

 

         Recommendation 6

 

 

         The AIV stresses the need for rationalisation of EuropeAid and would advise the Netherlands, through the European Council and the European Parliament, to ensure that these reforms actually lead to the faster and simpler allocation of resources, contingent on the progress made in implementing the action plans.

 

 

 

 

 

         Recommendation 7

 

 

         In the light of EU and Dutch interests in the region, it is crucial that sufficient financial resources are available for implementing the ENP. The AIV would urge the Dutch government, in the negotiations surrounding the Union’s 2007-2013 financial framework, to ensure that the necessary resources are set aside, so the Union can respond adequately to developments in the region.

 

 

 

 

 

An ongoing problem is the length of time between (a) the formulation and submission of project proposals for political and economic reforms and (b) the eventual allocation of resources for these projects. The AIV feels that this time gap should be reduced. One way of doing this would be to release funds on a limited scale at the preliminary stage to support the formulation of solid, well-thought-out proposals for projects and programmes. At the same time this would also increase the capacity for timely action, when unexpected opportunities for supporting political and/or economic reforms arise. On the basis of various discussions, particularly in Ukraine, the AIV has concluded that a lack of decisiveness has prevented the Union from responding effectively, particularly in the wake of that country’s Orange Revolution. Since developments in the countries concerned are influenced primarily by internal political and economic factors, it is crucial to respond swiftly to political trends in the region and seize opportunities to deploy the policy instruments of the EU and its member states.[3]

 

 

 

 

 

         Recommendation 8

 

 

         The AIV believes that the policy instruments used by the EU and its member states must be made more responsive to current developments. Supplementary to the ENPI, the AIV would strongly advise making funds available on a small scale in the planning stages, for the purpose of formulating well-thought-out project proposals. In matters of project funding, the AIV recommends delegating more authority, professional implementing capacity and resources to the EU missions in the countries in question.

 

 

 

 

 

Bilateral aid

 

 

 

 

 

The Netherlands has two complementary, bilateral programmes relevant to the EU’s eastern neighbours. The first of these is the Social Transformation Programme (Matra), which is managed by the Ministry of Foreign Affairs. The second is the Emerging Markets Cooperation Programme (PSOM), which is run by the Directorate-General for International Cooperation and which receives supplementary contributions from the Ministry of Economic Affairs for the part of the programme dealing with Ukraine. The Eastern Europe Cooperation Programme (PSO), previously operated by the Ministry of Economic Affairs, merged with the PSOM on 1 June 2005. Following a positive evaluation, parliament has approved a new policy framework for Matra along with a budget of 50 million. The AIV applauds the programme’s flexibility, its demand-driven ethos, its long-term vision and the coordination of its policies with the ENP, thereby setting the stage for an expansion of the programme to the Union’s eastern and southern neighbours. In this way, aid efforts are keeping pace with the enlargement of the EU. In addition to the aforementioned programmes, numerous aid programmes and initiatives aimed at supporting a wide range of activities have been launched by cofinancing organisations, the business community, other government authorities and civil society organisations. Through these initiatives, numerous organisations are involved in exchange programmes in the fields of education, health care and culture, municipal cooperation, law enforcement, banking and government auditing. The AIV welcomes this development, provided the programmes address the priorities identified by the recipient countries in the ENP action plans. It is encouraging to see that both bilateral programmes are concentrating more on the eastern ENP countries. By uniting the various strands of the Dutch development effort, this extra attention will benefit the constituency represented by the Netherlands at the World Bank and the IMF. The Netherlands also has a material interest in safeguarding the production and transportation of energy from this region.

 

 

 

 

 

         Recommendation 9

 

 

         Following up on the recommendations on the way the ENP is run, the AIV would urge the Dutch government to simplify the management of the programmes as much as possible.

 

 

 

 

 

         Recommendation 10

 

 

         In the view of the AIV, it is extremely important for the implementation of the bilateral programmes that the budgets for both Matra and PSOM are large enough to enable the Netherlands to make a substantial, long-term contribution to the process of economic and political reform in the region. In pursuing these goals, the Netherlands can draw on the experience it has acquired in its relations with the former candidate states, in terms of approach and policy instruments.

 

 

 

 

 

         Recommendation 11

 

 

         The AIV believes that bilateral programmes should complement the ENP and that such programmes should be coordinated with the ENP as well as with the line ministries. The AIV would also like to see these programmes play a role in the preliminary stages of the ENPI project formulation.

 

 

 

 

 

Border issues and visa facilitation

 

 

 

 

 

Besides aiding these countries in their transformation into free-market democracies which respect the rule of law, the neighbourhood policy also aims to achieve regional integration among the neighbouring countries and cross-border integration between the neighbouring countries and EU member states, mainly with a view to preventing the appearance of unnecessary new divisions in Europe. At the same time, the AIV predicts that the principle of free movement of people and goods within the Schengen zone will necessitate tighter controls at the external borders.

 

 

 

 

 

         Recommendation 12

 

 

         Free movement of people within the Schengen zone will necessitate tighter controls at the external borders. The AIV would recommend mitigating the repercussions of this development by granting flexible arrangements for local cross-border traffic whenever possible. Proposals to that effect by the Commission could serve as an inspiration for such a move.[4]

 

 

 

 

 

As to requests for visa facilitation by ENP countries, it is imperative that short-term visa policy remain an EC affair. For the time being, long-term visa policy will remain a matter for the individual member states, though in practice it is not so much the visa requirement itself that is an obstacle as the length of time, complexity and cost of processing the applications, a task that is carried out at national level. With a view to accelerating and simplifying the process, member states could make more specific coordination agreements. At the same time, they could discuss reasonable fees for issuing visas. To an extent, these types of issues can be seen as an outgrowth of the desire for more exchange programmes.

 

 

 

 

 

         Recommendation 13

 

 

         With respect to both short and long-term visas, the AIV would advise the Dutch government to join other member states in reflecting on ways of coordinating policies more closely, in the hope of accelerating and simplifying the application-processing procedures at national level.

 

 

 

 

 

The role of Russia

 

 

 

 

 

As stressed in chapter II, this report treats Russia as the ENP countries’ other neighbour and thus as an integral component of a triangular relationship. Russia occupies a crucial position in this relationship for a number of reasons, including its military presence, economic relations, its neighbours’ dependence on Russian deliveries of gas, oil and electricity and the presence of (often substantial) Russian minorities in these countries. Russia would like to see its special position recognised and its interests in the region respected. Russia’s unique position in the region is evidenced by its avowed lack of interest in EU membership and its decision to develop its own form of partnership with the Union, distinct from the ENP.[5] This partnership coalesced around the policy framework known as the ‘four common spaces’, which was agreed at the EURussia summit on 10 May 2005 in Moscow.[6] These spaces – the product of an initiative dating back to the St Petersburg Summit in 2003 – flesh out and build upon the EU-Russia Partnership and Cooperation Agreement (PCA), which will come up for renewal in 2007. Although the subject of the four common spaces lies outside the scope of the ENP, Russia is still eligible to receive funding for ENPI projects. It is also important for the EU to continue its policy of developing programmes with the countries and regions on the other side of its borders.

 

 

 

 

 

It is not only Russia that has major interests in the region. Within the triangular relationship described in chapter II, there are also essential interests and issues at stake for the Union. A good and balanced relationship with and an active role for Russia are critical, particularly when it comes to resolving the various frozen conflicts discussed above.

 

 

 

 

 

The EU’s growing dependence on Russian gas and oil and increasing competition in the Asian energy market from rising economies in the east (especially those of China and India) only underscores the need for an effective strategy for Russia within the framework of the Union’s neighbourhood policy. To ensure the success of this strategy, the Union will have to be open with Russia and their common neighbours and take genuine account of Russian interests in the region. Given Russia’s unique position and the interests at stake for the Union, one wonders if the European-Russian relationship might benefit from the creation of new consultative structures, which would go beyond the institutions established under the current PCA. There is already a precedent for this, namely the special relationship the Union is developing with other major players on the world stage, such as the US and China. The Russia-NATO Council is another possible example. Further institutional solidification of the European-Russian relationship rests on the importance of keeping Russia fully involved and reconciling it to the overtures its neighbours have been making towards the EU. The AIV would argue that the policy of four common spaces should be fleshed out, not only in terms of substance but also with respect to its institutional implications. It would be useful to examine the possibility of creating a special consultative structure for the Union and Russia to discuss issues of mutual interest.

 

 

 

 

 

         Recommendation 14

 

 

         With respect to Russia, the AIV urges the Netherlands and the EU to pursue a policy of openness, in order to eliminate any distrust of the ENP early on. The Union must strive to ensure that Russia is fully involved in any attempts to resolve regional conflicts. The AIV would recommend exploring various special consultative structures that could further this objective. The AIV would urgently suggest allowing Russia to participate fully in the ENPI for the purpose of developing programmes in those parts of Russia that border the EU. Finally, it is crucial for the Union’s long-term energy security that the EU as a whole regard these issues from a strategic standpoint and accord them a high priority in developing the agreed economic space with Russia.

 

 

 

 

 

Prospects for accession

 

 

 

 

 

In chapter IV, the AIV discussed the prospects for accession for the eastern ENP countries, particularly Ukraine and Moldova. Considering the political developments inside the Union, now is not the time to discuss this issue in any detail. Having said this, there remain compelling reasons to deepen relations with these countries, following recent political developments there. At some point they will apply for EU membership. For that reason, the AIV advocates devising a long-term strategy on the basis of the ENP for intensifying relations with these countries. This strategy, which would be contingent on further political and economic reforms, could even culminate in a new partnership relationship, a successor to the existing PCAs. There are several important reasons for considering such an approach: these countries border on the Union or will do so in the near future; they are part of Europe in a cultural, historical and geographical sense; and they have expressed a desire to join the Union. The most important factor of all, however, is that the prospect of membership, even if it lies in the very distant future, can make a significant contribution to the process of political and economic transformation. Yet ultimately it is up to the countries themselves to bring forward the prospect of EU membership. And should this prospect ever become concrete, it cannot be emphasised enough that these countries will be held to the same standards as any other candidate country.

 

 

 

 

 

         Recommendation 15

 

 

         In the light of the difficulties surrounding the ratification of the constitutional treaty and concern about the Union’s absorption capacity, the AIV recognises the need for a period of reflection on the future development of the EU. The same applies to the membership prospects for the eastern ENP countries, particularly Ukraine and Moldova. This is not the time for the Union to discuss membership with these countries in concrete terms. In the view of the AIV this in no way diminishes the arguments put forward in chapter IV supporting these countries’ aspirations to join the Union. For that reason the AIV would urge the government to remain alert to this issue. In particular, the AIV would advise the government to do all it can to encourage a long-term EU strategy for Ukraine and Moldova in order to further intensify relations and possibly lay the groundwork for new institutions. The AIV feels that the expiry of the current cooperation and partnership agreements with these countries would be the most appropriate time for this.

 

 

 

 

 

         Recommendation 16

 

 

         With respect to the debate on EU enlargement, the AIV would advise the government to be mindful of the level of popular support for enlargement among the current member states. However this is not to say that the government should not make its own decisions. It is the AIV’s belief that the government is responsible for providing information and stimulating debate on this matter.

 

 

 

 

 

         Recommendation 17

 

 

         For the Transcaucasus region, the AIV recommends continuing the ENP, on the basis of the existing partnership and cooperation agreements. The ENP is an adequate framework for responding to political developments in the countries concerned.

 

 

 

 

 

For the EU as a community of values, chief among them protecting human rights, the relationship with Belarus is of particular significance. Clearly, in the present circumstances the opportunities for the EU and the Netherlands to improve the human rights situation there are, in practical terms, very limited. And yet, this is precisely why it is so important to keep a close eye on developments there and maintain contacts with groups that can offer a counterbalance to an ever harsher dictatorship. It is crucial to have a targeted aid programme that can spring into action the moment a new, more democratic government takes office, as happened recently in Kyrgyzstan. The Union needs to coordinate its efforts with the international organisations that have a special responsibility on the European continent and experience with human rights enforcement: the Council of Europe and the OSCE. The same applies to the bilateral contacts, which are often critical for supporting the forces of democratisation in these difficult circumstances.

 

 

 

[1] Ministry of Foreign Affairs, State of the European Union (2005), The Hague, 21 September 2004, p. 45.

 

 

[2] See also J.W. van der Meulen, ‘Westelijke Balkan als testcase voor de Europese Unie’, Internationale Spectator 59 (6), 2005, pp. 319-324.

[3] Please refer to the conclusions of the conference ‘European Union and the South Caucasus: Opportunities for Intensified Engagement’, European Centre for Conflict Prevention and the Ministry of Foreign Affairs of the Netherlands, 24-26 May 2004, p. 5.

 

 

[4] Proposal for a Council regulation on the establishment of a regime of local border traffic at the external land borders of the Member States, COM(2003) 502, 14 August 2003.

 

 

[5] The question of whether Russia will ever become a member of the European Union lies outside the scope of this report. The AIV would observe that Russia has never shown any aspirations in that direction. Given Russia’s location and size, there is reason to doubt whether membership is a realistic possibility.

 

 

[6] Website: <http://www.eu2005.lu> Relations EU-Russia.

 

 

Advice request

 

Mr F. Korthals Altes
Chairman of the Advisory Council
on International Affairs
Postbus 20061
2500 EB Den Haag

 

Southeast and Eastern Europe and Matra Programme Department Bezuidenhoutseweg 67
2594 AC Den Haag

 

 

Date

7 April 2004

Contact

Tanja Röling

 

Our ref.

DZO-74/04

Tel.

+31 (0)70 348.6019

 

Page

1/1

Fax

+31 (0)70 348.5329

 

Encl.

1

tanja.roling@minbuza.nl

Re

Request for advice on future EU policy towards its eastern neighbours after enlargement

 

Cc

 

 

 

Dear Mr Korthals Altes,

It is with great pleasure that I hereby submit to you, in conjunction with the Minister for European Affairs, a request for advice on future EU policy towards its eastern neighbours after enlargement.

Your advisory report will be particularly important in the context of the Dutch presidency of the European Union in the second half of 2004. I intend to include a separate chapter in The State of the European Union 2005 updating the chapter in The State of the European Union 2002 entitled “From Marrakesh to Murmansk”. I would be very grateful if your advisory report were to be ready in the early stages of the Dutch presidency.

 

I look forward to your report with great interest.

 

 

Bernard Bot

Minister of Foreign Affairs of the Kingdom of the Netherlands

______________________________________________________________________________

Request for advice on future EU policy towards its eastern neighbours after enlargement

Introduction

Over the last two years, a debate has gradually got under way within the European Union about its policy towards those of its new neighbours that will not be included in the process of enlargement in the near future. Of central concern in this debate is ensuring that enlargement does not create new dividing lines in Europe.

In March 2003, the European Commission published its Communication “Wider Europe - New Neighbourhood: A New Framework for Relations with our Eastern and Southern Neighbours”. Looking ahead to the enlargement of the Union in 2004, the Commission stated that the EU could only be successful in the future as an area of stability, prosperity and progress if the positive developments within the EU radiated beyond its borders.

In order to achieve this, the EU needed to promote shared values and strengthen partnerships, so that the countries concerned would be better equipped to work with the Union in tackling a wide range of common challenges. The EU would also need to encourage a gradual internal transformation in these countries, moving them in the same direction as the European Union.

The Communication does not express an opinion on their prospects for accession. This is intentional. The Communication focuses on promoting many different forms of cooperation and integration, leaving aside the question of EU membership.

The Commission later published a second Communication – also in 2003 – that is relevant in this context, entitled “Paving the Way for a New Neighbourhood Instrument”. It focuses on the further development of the financial instruments that the EU requires to promote closer cooperation. In so doing it takes into account the expiry of existing contractual arrangements such as the Partnership and Cooperation Agreements (PCAs) (from 2007), the current TACIS regulation (in 2006) and the current financial perspectives (in 2006). It also allows for the phasing out of instruments applicable to member states joining the EU in 2004 or 2007.

Although the Commission’s Communication is intended to provide an integrated framework for relations with neighbouring countries, it focuses on two different regions which each face specific issues:

  • the eastern European region: especially Ukraine, Moldova and Belarus, giving consideration to the Russian Federation primarily in terms of its influence on these three countries. The possibility of including the countries of the southern Caucasus under this heading is being examined. A decision on whether to do so will have to be taken during the Irish presidency;
  • the Mediterranean region.

The need to differentiate both between different parts of regions and between forms of cooperation with individual countries is repeatedly underlined. The Communication also discusses the need to build on existing forms of cooperation between the EU and the countries concerned. The Commission’s proposals were broadly endorsed by the General Affairs and External Relations Council (GAERC) of 16 June 2003.

In addition, the EU security strategy adopted at the European Council of 12-13 December 2003 refers specifically to the importance of economic and political cooperation with neighbouring countries in order to create a secure environment along the EU’s borders.

In early May 2004, the Commission will present the first individual action plans for a number of new neighbours, where necessary in close cooperation with the High Representative for the CFSP. Agreement on these plans will in due course need to be reached with the countries concerned. The June 2004 GAERC will need to discuss these action plans and other Commission initiatives in this field.

The Wider Europe initiative is now called the European Neighbourhood Policy. The central question in this request for advice concerns the direction the European Neighbourhood Policy should take and how it should be implemented. This request will focus primarily on policy towards Ukraine, Moldova and Belarus. The role of the Russian Federation is addressed separately, and a number of specific questions are posed. These countries are sufficiently interconnected for it to be meaningful to consider them as a single region. Finally, this request touches on the possibility of extending the European Neighbourhood Policy to include the southern Caucasus, as this question has been given added impetus by recent developments in Georgia.

Supporting transformation
As the prospect of accession no longer features explicitly in the EU’s policy towards its new neighbours, effective “conditionality” will have to be built into it in some way, in order to encourage and support the transformation to a market economy, democracy and the rule of law. In the case of the central and eastern European countries acceding in 2004 or 2007, the prospect of joining the EU has turned out to be the best incentive for these countries to “sell” unpopular measures to their citizens in the short term. How can we, without holding out the prospect of EU accession, effectively encourage a degree of policy convergence on either side of the EU’s borders?

On this question, you may wish to address the following points:

  • Should the current PCAs (which apply for ten years and expire around 2007 for most countries) with the countries in question be replaced by a new kind of contractual relationship? If so, in what areas do additional arrangements need to be agreed? It is worth noting here that, in practice, most countries do not seem to be using the current PCAs to maximum effect. How can we encourage them to actually implement any new bilaterally agreed benchmarks and action plans?
  • What kind of instruments would be most effective as the EU seeks to assist the countries concerned in their transformation? The current TACIS regulation expires in 2006. At the moment – primarily for cross-border regional cooperation – elements of PHARE (which is being phased out with the accession of the countries concerned), Interreg and other instruments are being looked at.
  • Can forms of regional cross-border cooperation such as the Northern Dimension initiative or the Stability Pact for the Balkans serve as models for a new Eastern Dimension (which Poland, among other countries, is in favour of)?
  • How should the scope of EU support be defined in respect of the efforts of other international organisations (World Bank, EBRD, NATO, the Council of Europe and the OSCE) in the same countries to foster successful transformation?
  • How can we ensure that, as far as possible, EU support and comparable bilateral support from member states are coordinated?
  • How can we make best use of the knowledge and experience that the new member states (e.g. Poland, Lithuania and Hungary) have gained in transforming their countries successfully?

Perspectives on specific countries
When considering differentiation and the elaboration of the Wider Europe/European Neighbourhood Policy, we need to take careful account of the experiences of the countries concerned over the past ten years in their relationship with the EU, and of how they think these relationships should develop in the future.

The EU has a structured relationship with Ukraine in the form of a Partnership and Cooperation Agreement. A joint evaluation recently showed clear room for improvement in the implementation of this agreement in a number of areas. The benchmarks have, to a certain degree, already been agreed in the area of justice and home affairs. In addition, one of the EU’s first common strategies was for Ukraine. There are serious doubts about the effectiveness of this instrument. Although the scope for cooperation within the existing structures has by no means been exhausted, Ukraine has consistently sought to work towards a contractual relationship and would like to have the prospect of ultimate accession to the EU set down on record in some way. The current aim is a form of Association Agreement enabling Ukraine to grow closer to the EU in due course. In Poland, Ukraine has an advocate for its case in post-enlargement Europe.

A Partnership and Cooperation Agreement currently also exists with Moldova. In addition, the EU is backing the OSCE’s efforts to resolve the Transdniestrian conflict. After Romania’s accession to the EU, which is scheduled to take place in 2007, Moldova will become an immediate neighbour of the EU. Moreover, the relationship with Romania (whose territory, prior to the Second World War, included a large part of what is now Moldova) could also have repercussions within the EU if the Transdniestrian conflict is not resolved by 2007. Moldova participates in the Stability Pact for Southeast Europe. It would like its future relationship with the EU to develop along similar lines to that of other participants in the Stability Pact, i.e. the Balkan countries. A clear prospect of accession in due course has been held out to the Balkan countries. Should Moldova therefore also be offered the prospect of a Stabilisation and Association Agreement and, if so, on what conditions?

The most problematic relationship is that with Belarus. Because of the authoritarian regime in Minsk, the EU has adopted a restrictive policy based on the relevant Council conclusions of 1997. The EU agreed an internal benchmark paper in 2002, which set out how the EU can respond with positive measures to concrete steps taken by the authorities in Minsk on the path of political and economic reform. To date, however, Minsk has made no move in the direction envisaged by the EU. Belarus’s application for membership of the Council of Europe has been frozen for some time. Nor is there a PCA with the EU. A debate has again begun within the EU on how (possibly based on Wider Europe) it can influence developments and, for example, continue to support civil society and free media.

Please put forward specific recommendations for each country, both in light of the above questions about promoting successful transformation and with reference to the questions presented below concerning opportunities for further integration within wider European and Euro-Atlantic structures.

Integration of new eastern neighbours in European and Euro-Atlantic structures
The Commission’s Wider Europe Communication mentions the further integration of these countries, and does not rule out offering them a stake in the internal market. The promotion of the four freedoms (free movement of persons, goods, services and capital) is an important part of this process. In due course, neighbouring countries could take part in a wider Free Trade Area. The following questions arise:

  • What scope do you see for the EU’s eastern neighbours to be given a stake in the internal market and for the promotion of the four freedoms? What conditions should apply?
  • Should the EU seek to reach Free Trade agreements with its eastern neighbours (following their membership of the WTO), as it has with its southern neighbours?
  • What institutional frameworks would best help achieve these objectives?

In addressing these questions, consideration should also be given to the role that Russia still plays in the wider region of the former Soviet Union. The “Russian factor” is examined in more detail in the following section.

It should be noted, in the context of the EU’s relationship with the Russian Federation, that the EU intends to give the four “common spaces” substance, as agreed at the EU-Russia summits in 2003 in St Petersburg and Rome:

  • Common European economic space, accompanied by an intensive dialogue on energy;
  • Common space of freedom, security and justice (justice and home affairs), including combating organised crime and terrorism;
  • Common space of external security; cooperation in the fields of CFSP and ESDP;
  • Common space on research and education, including cultural aspects.
     
    Questions which arise in this context include:
  • Should the common spaces being developed with Russia ultimately include the EU’s eastern partners in the Wider Europe concept too?
  • In the development of its relations with Russia, to what extent should the EU be guided by the interests of its new eastern neighbours?
  • Can the EU reach agreement more readily with its new eastern neighbours than with Russia in certain areas?

The relationship of the EU’s new eastern neighbours with the Russian Federation
Relations between the EU and Russia have been examined above. However, there remains another important point to be considered, i.e. the choice facing the EU’s new eastern neighbours between, on the one hand, integration into Europe and Euro-Atlantic structures, and on the other hand, integration into Eastern frameworks (often dominated by Russia).

The Russian Federation has made clear its preference for a separate (and ideally privileged) relationship with the EU, rather than membership of the Union. Russia considers itself too large and too special a case (a “Eurasian” country) to join a union in which it would be just one of many members.

Russia adopts the same stance towards the Wider Europe initiative. In its Wider Europe Communication, the Commission was uncertain whether Russia itself could ultimately be an object of this exercise, rather than just an influencing factor in relations between the EU and its new eastern neighbours. Russia has since removed any uncertainty. Here too, it considers itself too large and too special a case to be considered in the Wider Europe framework. This being said, in its recent Communication on EU-Russia relations, the Commission advocated an action plan to give substance to the four common spaces, which will to some extent be comparable with the action plans currently being developed for relations with the EU’s new eastern neighbours.

For the EU’s new eastern neighbours, Russia is not only a very important partner, but also a power that is working towards alternative forms of integration, including economic integration, within the CIS or with a smaller number of states from the former Soviet Union. From the outset many attempts of this kind have been made within the CIS, but most have not progressed beyond the drawing board. The most recent attempt is a plan for a common economic space involving Russia, Belarus, Ukraine and Kazakhstan. In Ukraine in particular, this plan has met with considerable resistance among the political elite, given its potentially adverse effect on prospects for the hoped-for integration in European (EU) structures. Objections have also been raised in Belarus. Although Minsk is seeking closer integration with Russia (including in the framework of a Russia-Belarus Union), the conditions that Moscow has set (whereby Belarus would be a subordinate partner) appear to be unacceptable to President Lukashenko. All the countries involved in the common economic space referred to above wish to join the WTO. However, it is very doubtful whether they could do so simultaneously, given the differences in the extent to which reforms have been implemented, and in the level of these reforms.

Alongside Russian attempts to achieve a form of economic integration with a number of CIS states, Russia has in the last few years pursued a markedly more assertive foreign policy towards other CIS countries. Russia considers the CIS to be a special area of Russian interest. To date this has meant that Russia is less willing to talk about this area with third countries, including the EU, let alone cooperate with them. Russia exploits the economic dependence of CIS countries (including in the area of energy) in order to continue to exert political influence over them. In addition, Russia is gaining increasing economic influence in these countries following corporate takeovers by Russian companies.

Questions which arise on this point include:

  • What stance should the EU adopt concerning integration attempts within the CIS, and in particular, what does the EU consider to be incompatible with integration in western European frameworks?
  • What implications do the issues considered above have for these countries’ - and Russia’s - prospects for WTO membership?
  • How should the EU respond to the pressure exerted by Russia on countries in Wider Europe? Should the EU give the countries concerned special support to enable them to better withstand such pressure?
  • How could Europe encourage Russia to cooperate more to resolve frozen conflicts in CIS countries (in this context, especially those in Moldova/Transdniestria)?

Enlargement of Wider Europe to include the southern Caucasus?
The EU recently adopted a more active approach towards the southern Caucasus, as exemplified by the appointment of a Special Representative, Ambassador Heikki Talvitie from Finland. It was clear from talks with the three countries in question (Armenia, Azerbaijan and Georgia) that they wished the Wider Europe concept to be enlarged to include the southern Caucasus. The GAERC has always left the door open to such a move. Following recent developments in Georgia, it accepted that a decision would be taken on this during the Irish presidency.

The question arises here as to whether, and if so how, it is possible to differentiate between the southern Caucasian countries, and what conditionality will apply to the development of the concrete action plans. All three countries are partners of the EU in the context of a PCA and are members of the Council of Europe.

 

 

Government reactions

To the President of the                                                Southeast and Eastern Europe and

House of Representatives                                            Matra Programme Department (DZO)

Binnenhof 4                                                                Bezuidenhoutseweg 67

Den Haag                                                                   Postbus 20061

                                                                                 2500 EB Den Haag

                                                                                 

 

Date                 2 November 2005                                 Contact            T.M. Röling

Our ref.            DZO-183/05                                         Tel.                  070-348 6571

Re                    Government response to AIV report        Fax                  070-348 5329

                        ‘The European Union’s New

                        Eastern Neighbours’

Cc                    Advisory Council on International

                        Affairs

Dear Mr Weisglas,

 

 

On 7 April 2004 the Government asked the Advisory Council on International Affairs (AIV) to produce an advisory report on future EU policy on the EU’s eastern neighbours since its latest enlargement. The AIV report ‘The European Union’s New Eastern Neighbours’ was presented to the Government on 26 August 2005.

 

The Government’s general conclusion

 

The Government thanks the AIV for its report, which it notes agrees to a great extent with the positions the Government has adopted on the European Union’s relations with its new eastern neighbours. The report makes clear what is at stake for the Netherlands and the European Union in their relations with their eastern neighbours against a changing geopolitical backdrop. It also supplies a useful analysis of the problems surrounding these countries’ transition towards democracy, the rule of law and market economies, and the role of the European Neighbourhood Policy (ENP) in this development.

 

With regard to holding out the prospect of future accession to the eastern ENP countries, the Government and the AIV have a difference of opinion. In keeping with the memorandum ‘Borders of the European Union’ that was presented to the House of Representatives on 17 March 2005, the Government considers that the ENP is the best framework available for relations with the European Union’s new neighbours, and that holding out the prospect of their future accession is not appropriate at this time. The AIV echoes this perspective, but at the same time advocates taking a clear position on these countries’ aspirations to join the European Union, and is concerned that too great a reluctance to consider accession might undermine the position of pro-reform forces. The Government believes nonetheless that after the last major enlargement, with ten new member states in 2004, the European Union needs to devote its full attention to its consolidation and internal functioning. Further enlargement is still anticipated in the near future in any event, with the accession of current candidate countries and the Western Balkan countries. Moreover, the outcome of the referendum on the constitutional treaty in June 2005 shows that maintaining support for the European Union among the Dutch people requires a constant effort.

 

The Government agrees on the importance of intensive cooperation with the European Union’s eastern neighbours within the ENP framework, not only in order to promote common values and interests, but also with an eye to the strategic interests of the Netherlands and the European Union.  Future energy supplies, migration and combating organised crime are examples of the Dutch and European interests at stake. The Government stresses that the neighbouring countries themselves bear a great responsibility for giving concrete substance to the ENP, in the form of action plans for individual countries. The ENP countries are being offered better access to the European market in return for political and economic reforms. The evaluations planned for mid-2007 constitute an initial opportunity for measuring progress in ENP implementation.

 

The Government notes that the AIV has chosen in its report to focus on Ukraine and Moldova and only to a lesser extent on Belarus and the Southern Caucasus countries. In light of the geographical proximity of Ukraine and Moldova and their governments’ current course towards rapprochement with the European Union, this may be a natural choice. But since the political situation in Belarus offers few prospects for cooperation with the EU at the moment and the action plans for the Southern Caucasus are still in preparation, the Government would have appreciated more attention to these countries in the report.

 

Like the AIV, the Government considers good relations with Russia crucial, both for implementing the ENP with the EU’s eastern neighbours – particularly in the quest for a solution to the frozen conflicts – and for the EU’s own bilateral dealings with Russia. The EU is striving for a balanced relationship with Russia as a strategic partner; yet at the same time the Government notes that this is a complex relationship, in which divergent interests are possible.

 

Responses to the AIV’s recommendations

 

Multilateral and bilateral programmes

Recommendations 1 and 2

The Government shares the AIV’s opinion that good coordination among the EU and its member states’ various multilateral and bilateral programmes in the eastern neighbour countries is desirable, and that the EU is in principle the obvious organisation to play a leading role here. Experience shows, unfortunately, that coordination is often difficult to get off the ground. The AIV also points to the importance of setting clearer priorities in the action plans. The Government is in complete agreement. During preparation of future action plans and the 2007 evaluations, it will make a case once more for less broadly formulated action plans and a clearer choice of priorities within them.

 

Recommendations 3 and 4

Along with sufficient attention to reinforcing democratic reforms and the rule of law, the action plans also include specific proposals for improving the investment and business climate and further liberalisation of trade. Given the Netherlands’ constituency connections within the Bretton Woods institutions, it gives aid to a number of the new neighbouring countries for both promoting good governance and developing financial institutions. Ukraine, Georgia and Armenia receive aid for macroeconomic reform programmes. The Netherlands has a programme for financial reforms with Moldova so that Moldova can once again meet the International Monetary Fund’s standards. The Government agrees in principle with the AIV that education is a key to development. Exchange programmes could thus contribute to knowledge transfer. The Government notes however that an effective programme in this area can only succeed with an ambitious approach, so that it can make a critical difference. A commitment on this scale requires the international will to make the necessary capacity and resources available, while results can only be expected in the long term.

 

Recommendations 6, 7 and 8

Like the AIV, the Government sees the necessity of simplifying the EU’s allocation rules and use of financial instruments in the interests of its external policy. In the framework of the new financial perspectives for 2007-2013, the European Commission has proposed a simplified structure, aimed at more coherence and consistency and at more and better results. This means that the financial instruments TACIS (Technical Assistance to the Commonwealth of Independent States) and MEDA (the main financial instrument for implementing the Euro-Mediterranean partnership) are being incorporated into the European Neighbourhood and Partnership Instrument (ENPI). The ENPI can benefit both EU member states and neighbouring countries at the same time. This is not currently possible with TACIS, since internal and external financial instruments are completely separate and use different procedures. The ENPI makes it possible to deal effectively with specific problems relating to borders or transnational issues. The reform of the financial instruments will also focus attention on assistance that can be deployed quickly, for example in emergencies, if existing instruments are inadequate for this purpose. The Government advocates reinforcing external policy in particular. No decision has been taken yet, however, about the distribution of financial resources among the different external policy instruments, including the ENPI. The ENP and ENPI serve the needs not only of the eastern neighbour countries but also of the Union’s Mediterranean neighbours. The AIV seems not to have taken account of the fact that increasing the budget for the eastern neighbours would automatically come at the southern neighbours’ expense.

 

Recommendations 9-11

The Government is glad that the AIV rates bilateral aid programmes such as PSOM (the Emerging Markets Cooperation Programme) and MATRA (Social Transformation Programme) positively. The Government is working to give these programmes a flexible, demand-driven ethos in support of a sustainable economic and political transition in the medium term. The starting point is to make the programmes as accessible as possible to civil society organisations. In the short term, partly with this goal in mind, an effort is being made to simplify their management.

 

The Government attaches great importance to making these programmes complementary to the ENP. To this end, the orientation of the MATRA programme began to shift towards the ENP countries in 2004, after accession of the EU’s ten new member states. Beginning in 2005 a modest start was made in opening a number of MATRA instruments to Mediterranean countries, which fall outside the scope of the AIV’s report. The Government is pressing to expand the MATRA programme to Armenia, Georgia and Moldova in the short term.

 

Border issues and visa facilitation

Recommendations 12 and 13

The Government is aware, as the AIV notes, that free movement of people and goods within the Schengen zone will necessitate tighter controls at the European Union's external borders. These tighter controls will have an impact on regional integration and dynamics in many border areas. In order to mitigate the repercussions of this development, the European Union is in negotiation on special arrangements aimed at facilitating local cross-border traffic without undermining the necessary controls. The possibility is being mooted, for example, of establishing a ‘travel permit’ for local residents along the European Union’s new external borders.

 

With regard to the different visa regimes, the Government observes that granting long-term visas is a matter for national authorities. The Government does not in general view it as desirable to work towards a more flexible policy on long-term visas. For short-term visas (up to three months), the EU and Schengen have exclusive authority. The European Union has recently reached two agreements with Russia on visa facilitation and return and readmission. The EU and Ukraine will start comparable negotiations on these topics soon. The Government takes note of the AIV’s recommendation that improving facilitation services and more efficient processing of visa applications are desirable.

 

Relations with Russia and frozen conflicts

Recommendations 5 and 14

The AIV rightly points out that the frozen conflicts must be resolved. The stability, security, democratisation and economic development of both Moldova and the Southern Caucasus countries are being held back by these conflicts, which also have a regional character. The European Union is working actively to find solutions to these problems, looking particularly towards existing infrastructure for conflict resolution provided for example by the United Nations and the Organisation for Security and Cooperation in Europe. Due to the EU’s increased desire to play a specific role, special EU representatives have been appointed for both the Southern Caucasus and Moldova. Both representatives have been explicitly charged with making an effort to resolve the conflicts as part of their mandate. This resolve is expressed in the action plan for Moldova, which has already been approved, as well as in the action plans now in preparation for Georgia, Armenia and Azerbaijan. The Government shares the AIV’s opinion that the success of European policy on its eastern neighbours depends in part on cooperation with and involvement on the part of Russia. The AIV observes that openness and sensitivity to Russian interests must be a basic principle for the EU in the ENP region.

 

In EU-Russian relations outside the ENP framework, the AIV states that the four common spaces (economics; freedom, security and justice; external security; and research, education and culture) that the EU and Russia agreed in May 2005 must be fleshed out further at institutional and substantive levels, and the question should be explored whether it would be useful to set up new consultative structures that go beyond the Partnership and Cooperation Agreement (PCA). The Government concurs that the four common spaces need to be fleshed out further. This is a work in progress, and along with the PCA will be the framework for cooperation between the EU and Russia in the coming years. Giving substance to the four spaces will be financed on the EU side from TACIS, and starting in 2007 from the ENPI. The Government does not see anything to be gained by creating new consultative structures outside the structure of the PCA; the PCA provides enough scope for exchanging thoughts and taking decisions on different subjects at different levels. In addition an EU-Russia summit is held twice a year, while the EU only meets once a year at the highest level with most countries, including the US and China. Finally, the Government recalls the existence of the Northern Dimension, a cooperative framework in which the EU works jointly with Russia (and Iceland and Norway) in areas including the environment, transport, nuclear safety, economics, education and regional development.

 

Accession

Recommendation 15

The AIV takes a position in its report on how to deal with the new eastern neighbours’ prospects for accession. It indicates that it views any concrete prospect of Ukrainian and Moldovan accession as premature at this time, but presses for devising a long-term EU strategy for Ukraine and Moldova. The Government considers that this is not on the agenda now, because the EU needs to focus first on its consolidation and internal functioning and the imminent enlargements. The Government also thinks that attention should be paid first to reforms in the ENP countries themselves. It notes that the report does not consider either the consequences for these countries of joining the European Union or possible alternatives to full membership (such as ‘everything but the institutions’).

 

The Government believes that the relationship between the EU and Ukraine and Moldova should not be viewed narrowly in the light only of prospects for accession, and that the ENP is the best framework for cooperation at the moment, starting from the idea of a jointly elaborated action plan. The Government also takes note in the same spirit of the report’s comments on the Southern Caucasus countries. Finally, it observes that the action plans provide that a new agreement is planned when there has been sufficient progress in carrying them out.

 

Recommendation 16

The outcome of the referendum on the Constitutional Treaty on 1 June 2005 shows how important it is that citizens become more involved with the European Union. The Government thus agrees completely with the AIV’s recommendation to remain mindful of the level of popular support for EU enlargement among the peoples of the current member states. Enlargement is incidentally not the only subject for which the level of popular support is important. The Government is thoroughly convinced of the necessity of systematically different, more interactive and intensive communication about Europe so that citizens are better informed about major European issues. To this end it will make a greater effort in the coming year to provide information and launch debates about Europe. The issue of enlargement will have a place in its efforts.

 

Yours sincerely,

 

 

 

Bernard Bot                                                               Atzo Nicolaï

Minister of Foreign Affairs                                           Minister for European Affairs

of the Kingdom of the Netherlands                               of the Kingdom of the Netherlands

 

 

Press releases

 The press release related to this report has not been translated.